Sunshine bill is back with sharper teeth

Senators Chuck Grassley (R-IA) and Herb Kohl (D-WI) reintroduced their Physician Payments Sunshine Act, which would require that manufacturers and group purchasing organizations disclose all payments or transfers of value to physicians worth $100 or more.

The revised bill includes language mandating disclosure of physician investments in and ownership of manufacturers, and it has sharper teeth. Manufacturers or group purchasing organizations that fail to report payments can be fined between $1,000 and $10,000 per infraction, up to a total fine of $150,000 per company per year, where failure to report is deemed an oversight. For “knowing failure to report,” the ceiling on total fines goes up to $1 million per company.

Beginning in April, 2011, companies would be required to report payments and other transfers of value for: consulting fees; compensation for other services; honoraria; gifts; entertainment; food; travel; education; research; charitable contributions; royalty or license fees; current or prospective ownership or investment interests; CME speaker fees and grants, along with anything else the HHS secretary deems necessary. Where payments are related to marketing, education or research specific to a covered drug, device, biological or medical supply, the company would be required to furnish that information, including the name of the therapy.

The legislation specifies that it should not preempt state laws, allowing states to require further disclosures.

The bill directs the secretary of the Department of Health and Human Services to establish a disclosure procedure for companies and to make the information available online in an accessible and easily searchable format. The legislation includes a clause allowing companies to delay reporting for up to two years payments made for clinical investigations or product development agreements regarding new drugs, devices, biologics and medical supplies.

The bill won an endorsement from Eli Lilly & Co. last year after penalties for non-compliance were softened and companies were given more time to get in compliance. Since then, a number of big pharmaceutical firms have announced disclosure policies and PhRMA has issued stronger guidelines on payments to physicians, including a ban on branded pens and other trinkets.

Separately, the Accreditation Council for Continuing Medical Education announced it will begin disclosing whether or not individual accredited providers receive commercial support or advertising and exhibit revenue, along with the number of hours of medical education they report each year.